View Full Version : WWWA airline hub



OKCJapan
04-27-2011, 07:00 PM
I had an idea about 10 years ago when I learned about the proposed expansion of the airport. This idea was to start a new airline that would have its hub here in OKC.
This airline would connect OKC to many of the other large metro areas that are not serviced by one of the airlines already operation out of OKC.


Western cities serviced would include, San Francisco, LA(Ontario), Seattle, Portland, Sacramento, San Diego, Billings, Boise, Tempe, Albuquerque, El Paso, New Orleans, Omaha,
Eastern cities serviced, would include, Milwaukee, Indianapolis, Cleveland, Louisville, Buffalo, Charlotte, Pittsburgh, Nashville, Birmingham, Charleston, Jacksonville(FL), Miami
The airline would service just a few cities to begin with in order to generate the capital to add more routes. The main obstacle was the find the investors. It would take an incredible amount of start up. Even though, tt that time I began putting together a business plan but then September 2011 happened, I pretty much abandoned the idea because of the affect it had on the airline industry.

It seems that with so many of the airlines going belly up or merging, OKC is becoming less of a target for airlines. This to me would only justify the possibility of such an airline becoming a reality, especially with the growth the NBA seems to have sparked here.

All that being said, I don't know if it would work in OKC. There is no doubt a great percentage of the passengers would be transit. Usually this is a obstacle to the health of a hub airport. Example CVG.

Maybe it is too little to late for such a proposal. Just a dream of mine that maybe I should of continued to pursue. What do you think

Kerry
04-27-2011, 10:53 PM
With the coming hyper-inflation we will be losing airlines - not getting more. Flying is already too expensive for most people and it is only going to get more expensive. The world is about to become a much larger place for the vast majority of the people.

ljbab728
04-27-2011, 11:03 PM
With the coming hyper-inflation we will be losing airlines - not getting more. Flying is already too expensive for most people and it is only going to get more expensive. The world is about to become a much larger place for the vast majority of the people.

That certainly is not obvious based on the load factors, Kerry. I realize that airlines have cut back on the number of flights which affects that but saying that it is too expensive for most people is not accurate at all. There are a number of places such as New York and Denver where prices are much lower from OKC now than they were 10 years ago. You can speculate all you want on what may happen in the future and I don't have a crystal ball any more than you do.

Kerry
04-27-2011, 11:45 PM
That certainly is not obvious based on the load factors, Kerry. I realize that airlines have cut back on the number of flights which affects that but saying that it is too expensive for most people is not accurate at all. There are a number of places such as New York and Denver where prices are much lower from OKC now than they were 10 years ago. You can speculate all you want on what may happen in the future and I don't have a crystal ball any more than you do.

Did you watch the Ben Bernanke show yesterday?

http://www.nwaonline.com/news/2011/apr/27/top-us-airlines-lose-1-billion-20110427/?nwa-business



With fresh red ink at Delta and US Airways, the five biggest U.S. airlines showed a combined loss of more than $1 billion for the first quarter. Soaring jet fuel prices are the big culprit.


http://aviationblog.dallasnews.com/archives/2011/03/analyst-expects-amr-to-lose-ov.html



Airline analyst Helane Becker now thinks AMR will lose $1.1 billion in 2011, as the Dahlman Rose & Co. analyst cut her earnings estimates for American Airlines' parent after AMR issued an investor update Tuesday morning.

Becker cut her 2011 forecast from a loss of 75 cents a share, or about $250 million, to a loss of $3.30 a share. For first quarter 2011, she now expects a loss of $1.35, or about $450 million, down from her prior estimate of a $1.12 per share loss, or about $373 million.

"We do not expect AMR to be profitable in any quarter this year, and as a result, we will maintain our Hold rating on the shares," Becker wrote in an earnings note to investors. "We believe these shares are unattractive until AMR can demonstrate some level of profitability."

ljbab728
04-28-2011, 12:00 AM
Did you watch the Ben Bernanke show yesterday?

http://www.nwaonline.com/news/2011/apr/27/top-us-airlines-lose-1-billion-20110427/?nwa-business



http://aviationblog.dallasnews.com/archives/2011/03/analyst-expects-amr-to-lose-ov.html

Kerry, my response was concerning your statement about the cost of flying for the public, not the profitability of the airlines. Airlines have been in dire straits and consolidating for years. That is nothing new.

OKCJapan
04-28-2011, 04:44 AM
I agree, keeping an airline profitable in today's economy with the price of fuel is a daunting task.

I think that many americans still fly regularly though.

Kerry
04-28-2011, 06:24 AM
Kerry, my response was concerning your statement about the cost of flying for the public, not the profitability of the airlines. Airlines have been in dire straits and consolidating for years. That is nothing new.

Bag fees alone can cost upwards of $120 each way for a family of 4. We looked at going to Europe recently and found tickets for $700 to Ireland (cheapest tickets I could find to anywhere in Europe). After fees and surcharges were added on it came to over $1000 per ticket and we still would of had to pay another $240 in bag fees once we got to the airport. At $4,500 to fly to Ireland we said no thanks. We can take a 5 days cruise for under a $1,000.

bombermwc
04-28-2011, 06:55 AM
^ you can repeat that story all over the place. You also can't blame fuel prices as much as you want to. Have you ever noticed that (just like gas prices) the price will steadily increase, the airline will say it's because of fuel prices, but once the price of fuel goes down, the ticket price continues to rise. They just use fuel as an excuse. Not to mention the fact that they buy fuel in wholesale amounts, so the daily cost of fuel has nothing to do with anything for airlines. It's just a bunch of crap that people believe and then pay for.

Flying has turned into a horrible experience compared to what it was 10 years ago. You're slapped with countless fees, have to deal with incredibly rude TSA folks, cramped conditions on the airplane itself (thank the fees for all those people shoving more than will fit in the overhead), delay after delay for stupid crap that's the airline's fault, missed flights and airlines that don't do what they should to get you to your destination...ie put you on someone else's plane, high prices which are exasserbated by consolidation and decreased competition, bad food, long tarmac waits, etc. The list just goes on and on and on.

Basically its so bad that people would rather drive for very long distances rather than fly. I do that every time I go to Alabama because it just doesn't make any sense to go through it all for a flight. Even if gas was $6 a gallon, I'd still save hundreds of dollars by driving. As long as that's true, then why do it? Even on a 12 hour drive, you end up only saving yourself something like 4 hours after you factor in the commute to the airport, parking, shuttle, check-in, security (get fondled by tsa), wait to board, wait to take off, flight, wait to "dock", wait to unload, wait for bags, shuttle/taxi/rental car, commute to destination.

Kerry
04-28-2011, 07:28 AM
That is the thing Bomber - the leisure travel industry is dying. We frequent Disney World a lot and 2 months ago my wife kids stayed at a Disney resort. For the first time they were charged $10 per night to park at the hotel. On their 5 night stay that came $50 she didn't plan to spend. Upset about the fee she asked why Disney was doing that. They said more people are now driving to Disney instead of flying. This causes three problem for them. 1) Disney is heavily invested in transit from the airport. 2) Parking is becoming crowded at Disney so they have to build more spaces. 3) The Disney model is built for a captive audience. They don't want people leaving Disney property once they are there. So to solve those three issues they are trying to discourage people from driving.

redland
04-28-2011, 07:45 AM
I agree that OKC is underserved by the airlines. However your "hub" proposal seems overly ambitious. I don't think the passenger load to most of the cities you cite is enough to support direct flights (e.g., Billings, Boise, Buffalo, Charleston, to name a few). Of course not each city would necessarily have non-stop servie. but to take Billings as an example. Non-stop? out of the question. But what city would you propose as an intermediate stop? The two obvious examples, Denver and Salt Lak, are already well served. Similar questions could be posed for most of the cities you name. So while I agree we need to keep pusing for expanded service to some cities, I don't think the hub idea is going to fly.

OKCJapan
04-28-2011, 07:56 AM
redland,

I think you have a point. Obviously, I would have to start with a few connections that would yield high capacity flights. Then from, adding flights would be on based on if the the route could be operated at a reasonable profit.

Swake2
04-28-2011, 08:02 AM
Bag fees alone can cost upwards of $120 each way for a family of 4. We looked at going to Europe recently and found tickets for $700 to Ireland (cheapest tickets I could find to anywhere in Europe). After fees and surcharges were added on it came to over $1000 per ticket and we still would of had to pay another $240 in bag fees once we got to the airport. At $4,500 to fly to Ireland we said no thanks. We can take a 5 days cruise for under a $1,000.

Most airlines waive bag fees for the first two bags on international flights, but go on.....

Kerry
04-28-2011, 09:01 AM
The only hope OKC has for a hub is the Southwest/AirTran merger. That is hub and non-hub airlines trying to merge. We will see which side wins.

Kerry
04-28-2011, 09:09 AM
Most airlines waive bag fees for the first two bags on international flights, but go on.....

I actually didn't know that - but it still wouldn't have changed my plans. $4,500 for 4 tickets did that.

Patrick
04-28-2011, 11:30 AM
Concerning the hub issue, Great Plains Airlines already tried this, with Tulsa and OKC as their hub cities, and it failed miserably. They're now bankrupt.

HOT ROD
04-28-2011, 12:03 PM
that was the mistake, Tulsa AND OKC. Should have picked one, say OKC for 'mainline' flights to the major markets. .... and then had frequent flights to/from Tulsa and other OK/Regional cities on smaller planes. In my humble opinion, it seems as if Tulsa was using the airline as a status symbol and threw only OKC in just to bump up the pax numbers - big mistake. ...

It could have worked, Horizon/Alaska does this in the Pac NW, I don't really see why it wouldn't work in underserved Oklahoma/Kansas etc region - competing effectively against DFW and DAL. ...

semisimple
04-28-2011, 01:55 PM
Bad idea. There's no chance of OKC becoming a hub. For starters, there isn't a high demand for air travel in/out of OKC, so there would be few people benefiting from an increase in direct flights to other US cities. Just look at the 2010 passenger counts at WWWA vs. some other airports in mid-sized cities that don't have major hub operations:

OKC - 3.4 million passengers/yr

Nashville - 8.8
Raleigh-Durham - 8.7
Austin - 8.4
New Orleans - 8.2
Indianapolis - 7.4
Columbus - 6.2
Albuquerque - 5.6
Jacksonville - 5.5
Omaha - 4.2
Louisville - 3.3
Richmond - 3.3

Other smallish cities like Raleigh-Durham or Austin would make a little more sense for new hubs because those cities have SO many connecting flights and much more traffic to major hubs already (Atlanta and Dallas, respectively). What HOT ROD is saying about being a regional connector makes sense, but Dallas and KC would be hard to compete with.

kevinpate
04-28-2011, 02:05 PM
Most airlines waive bag fees for the first two bags on international flights, but go on.....

This has already changed for some airlines, but I don't know how widespread it is. Poppa-in-law headed off to Africa on a mission trip in March. His luggage weight limits were lower, by quite a bit, than his prior mission trips in years gone by. Adding to the ouch factor, bag fees were well above what was originally anticipated (based on his prior mission trips) and the fees began with either bag 2 or bag 1.

ljbab728
04-28-2011, 10:22 PM
That is the thing Bomber - the leisure travel industry is dying. We frequent Disney World a lot and 2 months ago my wife kids stayed at a Disney resort. For the first time they were charged $10 per night to park at the hotel. On their 5 night stay that came $50 she didn't plan to spend. Upset about the fee she asked why Disney was doing that. They said more people are now driving to Disney instead of flying. This causes three problem for them. 1) Disney is heavily invested in transit from the airport. 2) Parking is becoming crowded at Disney so they have to build more spaces. 3) The Disney model is built for a captive audience. They don't want people leaving Disney property once they are there. So to solve those three issues they are trying to discourage people from driving.

Disney has never been known as an economy destination. Anyone who goes there without being prepared to spend more than they planned is making a huge mistake. With that said, the leisure travel industry is far from dying. Various segments have ups and downs depending on a lot of factors but the leisure travel industry will continue to be there.

ljbab728
04-28-2011, 10:35 PM
This has already changed for some airlines, but I don't know how widespread it is. Poppa-in-law headed off to Africa on a mission trip in March. His luggage weight limits were lower, by quite a bit, than his prior mission trips in years gone by. Adding to the ouch factor, bag fees were well above what was originally anticipated (based on his prior mission trips) and the fees began with either bag 2 or bag 1.

Is it possible that he had some foreign airlines involved in his itinerary? Everything is, of course, subject to change but the major US international carriers are not currently doing that. There are a few minor carriers like Spirit Airlines and other charter carriers that will charge for checked bags to mostly vacation destinations like Mexico and the Caribbean.

bombermwc
04-29-2011, 07:09 AM
Heck, I'd just assume NOT have a hub here. Right now it's incredibly fast and easy to get in and out of the airport. Why would I want to increase the difficulties in my air travel by asking them to throw more folks at the airport?

Spartan
04-29-2011, 11:26 AM
There are some hubs that are pretty easy to get in and out of. Not all airports are like DFW or Bush. KCI, for example..

OUman
04-29-2011, 12:33 PM
Actually of all the hubs I have used, DFW is one of the more easier ones to get around. The TerminaLink connects you to all terminals within 5-7 minutes, and the terminals themselves are narow enough to where you can get between landside and airside within 15 minutes maximum most of the time. For a large hub, that's not bad at all. Sometimes it takes as much as 10 minutes at OKC.

bombermwc
05-02-2011, 07:03 AM
Yeah I like DFW - it's super easy to get around and pretty fast with the tram. Nothing like what it used to be.

However, you could just as easily turn into Miami...and not even be a hub...shudder...or O'Hare (AHHHH). It took DFW 25 years to get where it is today.

I'd like to see a tram set up to replace the giddy-ups. It takes waaaaay too long for such a short ride.

Kerry
05-03-2011, 08:42 AM
As I said - leasure travel is about to get a lot more expensive as Southwest makes the shift to high dollar business travelers.




The new frequent-flier program was designed expressly to reward customers for buying more-expensive tickets. It sent the message that Southwest wants business travelers, even at the expense of angering longtime leisure customers. The average fare on Southwest has risen about 12 percent a year recently, but the airline would like to push that even higher.


Read more: http://newsok.com/southwest-buys-airtran-in-business-travel-move/article/3564202#ixzz1LIhL3Ueu

SkyWestOKC
05-03-2011, 10:01 AM
Southwest isn't the only price factor airlines work with. If southwest goes up, other carriers will match, or possibly undercut. Leisure travelers are rarely loyal. Business travellers are.

Kerry
05-03-2011, 10:43 AM
SkyWestOKC - do you think the leisure air travel industry is about to tank?

SkyWestOKC
05-03-2011, 02:56 PM
You won't notice it until late summer or early all at the earliest. Most people have already booked summer plans. So there's no way to know until you catch up to where future bookings are happening.

Personally, I don't think it is about to tank, if it does, it won't be nearly as bad as in 2008.

ljbab728
05-03-2011, 09:59 PM
SkyWestOKC - do you think the leisure air travel industry is about to tank?

Kerry, I deal with this every day. I see more support for leisure travel now than I've seen for at least the last 3 to 4 years. In the OKC area, at least, people are willing to travel and spend.

Kerry
05-04-2011, 08:18 AM
Kerry, I deal with this every day. I see more support for leisure travel now than I've seen for at least the last 3 to 4 years. In the OKC area, at least, people are willing to travel and spend.

I hope you are right but I am afraid our national economic direction doesn't look good. I see a lot more staycations in our national future.

ljbab728
05-04-2011, 10:17 PM
I hope you are right but I am afraid our national economic direction doesn't look good. I see a lot more staycations in our national future.

The people in the OKC area certainly aren't worrying about that right now. Most people I talk to feel like they've been limited for the last few years and are ready to spend and go.

bombermwc
05-05-2011, 06:44 AM
I'm not sure what economic outlook you've been looking at Kerry, but everything is on the upswing now. Especially here in OKC. So not sure where that comes from.

Kerry
05-05-2011, 07:23 AM
I'm not sure what economic outlook you've been looking at Kerry, but everything is on the upswing now. Especially here in OKC. So not sure where that comes from.

Remember this post in 6 months.

http://finance.yahoo.com/news/New-jobless-claims-jump-to-rb-1852891451.html?x=0&.v=1

bombermwc
05-06-2011, 06:40 AM
But aren't we talking about OKC here? Take a look around here (oh yeah, you don't live here). The city is passing projections for revenue. We're not laying off people, in fact we're in a state of influx from other states. Our unemployment rate is still low and our economy is doing well. Even our state cuts aren't impacting like they were projected to because of the economy swinging back. Even my own office had a record setting quarter. So as Oklahomans have more disposable income, things like flying become easier to absorb. Like usual, Oklahoma has proven more robust in it's economy because we never over blew the market with stupid numbers, broad based bad mortgage choices, etc. Even at a time when the big boys like Chesapeake had a loss, the state revenue is still higher. That also shows a diversification of the economy here away from being tied to energy so much.

Kerry
05-06-2011, 08:33 AM
But aren't we talking about OKC here? Take a look around here (oh yeah, you don't live here). The city is passing projections for revenue. We're not laying off people, in fact we're in a state of influx from other states. Our unemployment rate is still low and our economy is doing well. Even our state cuts aren't impacting like they were projected to because of the economy swinging back. Even my own office had a record setting quarter. So as Oklahomans have more disposable income, things like flying become easier to absorb. Like usual, Oklahoma has proven more robust in it's economy because we never over blew the market with stupid numbers, broad based bad mortgage choices, etc. Even at a time when the big boys like Chesapeake had a loss, the state revenue is still higher. That also shows a diversification of the economy here away from being tied to energy so much.

Who do you think uses a hub? A vast majority are people changing planes. The Oklahoma economy might be doing great but the rest of the country is in trouble. Unless of course you want to join my "Would Oklahoma and Texas be better off forming their own country" thread.

venture
05-06-2011, 11:29 AM
While connecting traffic is a big portion of a hub's success, it can also be the crutch that kills it. Cincinnati is a great example. Over 80% of traffic there was connecting...very little O&D (Origin & Destination) traffic was was starting or stopping their trip at CVG. In order for any new "hub" to be successful, it needs strong O&D. While I haven't really commented much on this thread so far, the prospects stated by the OP just aren't rational right now.

We have to look at O&D markets to really see where the strength and if there is any room for a startup. Keeping in a mind a start up is going to have to have a very deep pocketed sugar daddy. JetBlue launched with over $125 million in the bank over 10 years ago. Allegiant, the other recent successful startup, isn't a traditional airline in the sense. Yes it is a fully scheduled airline like all the rest, but it is first and foremost a travel company that is profitable when it sells its passengers vacation packages along with air fare. The market right now is trying to reduce capacity even more now to get a premium on yields and increase profitability to pay down debt. American is on the verge of Chapter 11 still. United Continental is still buried in debt, the same with Delta and US Airways. Southwest is even feeling the sting since their successful fuel hedging program of several years ago is mostly neutralized now.

However, that doesn't meant there isn't opportunity out of OKC for a regional or local-focused airline. A hub airline? Not a chance. Just take your money and burn it. You'll have more fun. So let's look at the last available O&D figures.

Our Top 10 Markets:

Houston, TX - Southwest Controlled with 62% market share.
Las Vegas, NV - Southwest Controlled with 69% market share, but United is the low fare leader (11% market share).
Denver, CO - Southwest controlled with 62% market share.
New York, NY - Served by United, but American has highest market share (32%) and Delta is low fare leader (26% market share).
Chicago, IL - American has 40% market share, but Southwest low fare leader (but only 26% market share).
Dallas, TX - Southwest controlled with 64% market share.
Baltimore, MD - Southwest controlled with 64% market share, but United is low fare leader (10% market share).
Orlando, FL - Not served nonstop, but Southwest has 40% market share.
Los Angeles, CA - United controlled with 60% market share, but Southwest is low fare leader (21% market share).
Seattle, WA - Not served nonstop, but Southwest has 32% market share.

So a couple things that jump out. 1) Southwest is going to be a pain in the neck. They aren't the low fare leader in some of the markets they serve, but they have such brand loyalty in Oklahoma that local travelers don't care that they could be paying $20 or $150 more for their flight by choosing Southwest. 2) All these top markets range from 553 passengers a day (Houston) down to 189 passengers a day (Seattle)...so most the primary markets that could be evaluated for nonstop service are already taken care of. When you get below 200 passengers a day you start to have to rely on connecting traffic unless you have the equipment to make it work at the right fare to cover the costs.

Orlando is a market not served nonstop but is in the Top 10. This route has been attempted too much and has proven to be a failure from OKC. Frontier, Delta, Southwest and others have tried it. Allegiant was going to, but decided against it and pulled out of OKC completely. Seattle could be a potential market for Alaska out of OKC, but it would also benefit from the ability to have a lot of connecting traffic. However, this route likely will never happen unless OKC is willing to pony up a couple million to subsidize the start up.

The next batch of cities really don't provide much more in the way of saying "Yes! That market will work." Phoenix, Washington, Atlanta, St. Louis, and Kansas City are all served nonstop now and are either very thin O&D routes (Washington) or require connecting traffic to support (the rest). San Antonio, San Diego, Tampa, San Francisco, and Philadelphia fill out the next batch of 10. San Antonio was tried...twice recently. Both Trans States (United) and ExpressJet couldn't make it work. Same with San Diego. Tampa is Orlando Part 2. SFO and PHL could work, but only operated by the hub airlines there (United and US Airways) to permit connecting traffic to support them.

So back to an OKC based airline. The prospects are not great. However, there are two scenarios that could work.
1) Establish or capture a local service airline that operates EAS (Essential Air Services) to build a regional network that feeds into OKC. This would be an airline that would operate aircraft with 9 to 19 seats to markets like Ada, Ardmore, Ponca City, Lawton, Altus, Enid, Dodge City, etc and feed into OKC. The goal would be to get these subsidized under the EAS system, but that would prove incredibly difficult with airlines working to serve these (with EAS subsidies) to hubs like Denver, St. Louis and Dallas.

2) Establish a Great Plains mk II. The concept was good, but the execution was horrible. I also feel the aircraft type wasn't good. While I really like the Dornier 328Jet, very fun to ride on, but it is a regional jet which means fuel costs are horrible. I would look at more of a 40-70 passenger turboprop such as the new generation Q400 or ATR-42/72. I would then look for regional business markets that are with in range of the aircraft where I can guarantee at least a half full plane (which is typically the break even on these) at fares that would greatly challenge established airline - while still being profitable. With the amount of consolidation in the market right now, it almost seems we may see an eventual return of having the major trunk airlines on the higher demand routes between medium and large cities. However, that means many smaller markets get axed. We've seen this a lot already from previously served EAS markets or just smaller airports with in 100 miles of larger hubs. I think at some point in the future, it would be good to revisit the local airlines of the past and bring in more point-to-point regional services. Say from OKC you do markets like Tulsa, Colorado Springs, Wichita, Lawton, Amarillo, Dallas, Little Rock, Nashville, Albuquerque, Omaha, San Antonio, Austin, El Paso, Lubbock, Midland, etc. Not saying all of these would work, but giving a rough sketch of what a route map could look like. Take these cities and start doing connect the dots between them as well. It is also taking what Southwest did in Texas and the South and revisiting it, but with smaller more efficient aircraft. Air Wisconsin is another airline that I like to look back on with the network they had in the 80s. They served many of the top markets in the Great Lakes well through this type of spider web network.

Either way...OKC and most of the country will continue to see their air service choices reduce. Consolidation is well under way and we'll likely see 1 or 2 more mergers take place in the next 3-5 years to further cut back competition. The next logical question is when is the right time to step into the market and with what plan. The airline industry can be fascinating at times, but it is also extremely risky. It is definitely an industry where you can be guaranteed to become a millionaire...if you start out a billionaire.

Kerry
05-06-2011, 12:00 PM
I am not sure about the future of EAS. It seems to be on almost everyones chopping block. On a side note, this is why the State needs to look at a state-wide rail network. With my route shown in another thread alomst every town in Oklahoma with more than 1,000 people would be connected to WRWA and Tulsa International.

OUman
05-06-2011, 12:57 PM
The routes that you mention venture where Southwest is often the higher priced airline are nonstop routes. Many a time there are cities like Austin (where I am headed in the summer), Ft. Lauderdale, Omaha, Milwaukee, San Francisco etc where we don't have nonstops. That's where Southwest is actually cheaper by fare alone, the others are actually more expensive (and even more so with bag fees and other fees which Southwest doesn't charge). That's the reason I am flying Southwest to Austin this summer, I checked both AA and CO, and both were about $40 higher than WN. Doesn't seem like much but when you're on a budget, $40 is a lot of savings.

I'm not saying that WN is a low fare airline, it's a low cost airline, it can keep fares lower on average by keeping its costs low. Neither am I saying that WN is always lower, but take out Southwest from markets it recently entered, and you'll see fare increases. All markets Southwest entered in the last year or two had fare decreases because other airlines started matching its fares.

On another note, another in-state airline based at OKC may not be such a good idea when airlines are trying to cut out competition. Let passenger traffic increase, focus on getting more people to use OKC instead of DFW, and once it gets to about 4 million/yr with good yields-not just loads, you'll have more of an advantage in getting more planes/types or starting an airline.

venture
05-06-2011, 02:26 PM
The routes that you mention venture where Southwest is often the higher priced airline are nonstop routes. Many a time there are cities like Austin (where I am headed in the summer), Ft. Lauderdale, Omaha, Milawaukee, San Francisco etc where we don't have nonstops. That's where Southwest is actually cheaper by fare alone, the others are actually more expensive (and even more so with bag fees and other fees which Southwest doesn't charge). That's the reason I am flying Southwest to Austin this summer, I checked both AA and CO, and both were about $40 higher than WN. Doesn't seem like much but when you're on a budget, $40 is a lot of savings.

Right...and nonstop really should always include a fare premium over connecting/direct routes. The connecting network allows airlines to spread the costs out more so one market isn't having to sustain itself entirely.


I'm not saying that WN is a low fare airline, it's a low cost airline, it can keep fares lower on average by keeping its costs low. Neither am I saying that WN is always lower, but take out Southwest from markets it recently entered, and you'll see fare increases. All markets Southwest entered in the last year or two had fare decreases because other airlines started matching its fares.

I think it will be interesting to watch what happens to markets that had AirTran and Southwest in them and what the fares do. I won't be shocked to see fares come up quite a bit as Southwest eliminates competition. Not to mention the smaller AirTran markets that, contrary to the P.R. smokescreen coming from Southwest right now, will eventually get the ax.


On another note, another in-state airline based at OKC may not be such a good idea when airlines are trying to cut out competition. Let passenger traffic increase, focus on getting more people to use OKC instead of DFW, and once it gets to about 4 million/yr with good yields-not just loads, you'll have more of an advantage in getting more planes/types or starting an airline.

It would be interesting to see what the exact leakage figures are right now from the OKC market. I also suspect we are going to see increasing pressure on the catchment area of OKC as well if Southwest retains Wichita (from AirTran). They more than likely will add additional services there which will make it more suitable for people in Northern Oklahoma to drive there. Granted, their contributing numbers may not be all that big anyway. We also have to consider any passengers we might be getting from that area or Southern Kansas as well that will no longer need to drive to OKC for Southwest.